Aviva 2007 Annual Report Download - page 264
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Time value of options and guarantees
The following table sets out the time value of options and guarantees relating to covered business by territory.
2007 2006
£m £m
United Kingdom 50 50
France 89 77
Ireland 22
Italy 22 17
Netherlands (including Belgium and Germany) 129 146
Poland 44
Spain 44
Other Europe 1–
Europe 251 250
North America 85 68
Asia Pacific 64
Total 392 372
The time value of options and guarantees (TVOG) is most significant in the United Kingdom, France, the Netherlands
and the United States. In the United Kingdom, this relates mainly to non-market value adjustment (MVA) guarantees
on unitised with-profit business and guaranteed annuity rates. In France, this relates mainly to guaranteed crediting rates
and surrender values on traditional business including the AFER fund. In the Netherlands, this relates mainly to maturity
guarantees on unit-linked products and interest rate guarantees on traditional individual and group profit sharing business.
In the United States, this relates to crediting rate, death benefit and surrender guarantees on life business.
The TVOG has increased by £20 million to £392 million, reflecting the impact of adverse investment variances.
Geographical analysis of fund management operating profit
The summarised consolidated income statement – EEV basis, includes profit from the Group’s fund management
operations as analysed below. This excludes the proportion of the results of Morley’s fund management businesses, of our
French asset management operation Aviva Gestion d’Actifs (AGA) and other fund management operations within the
Group that arises from the provision of fund management services to our Life businesses. These results are included within
the Life EEV operating return.
2007 2006
£m £m
UK business 40 35
International business 11 9
Morley 51 44
Royal Bank of Scotland (9) (7)
Norwich Union investment funds (1) 1
United Kingdom 41 38
France 10 10
Netherlands 17 33
Other Europe 43
Europe 31 46
North America 33
Asia Pacific 15 9
Total 90 96
Analysis of other operations’ operating result
The summarised consolidated income statement – EEV basis, includes the results of the Group’s other operations
as analysed below. Where subsidiaries provide services to our life businesses, that proportion has been excluded. These
results are included within the Life EEV operating return. Other subsidiaries providing services to our life businesses do not
materially impact the Group results.
2007 2006
£m £m
United Kingdom (8) 36
Europe (45) (53)
North America (4) –
Asia Pacific (13) (6)
Total (70) (23)
Aviva plc
Annual Report and
Accounts 2007
260
Financial
statements
Alternative method of reporting long-term business profits continued